The Bank of England Act 1998 (Macro-prudential Measures) (Amendment) Order 2021

Amendment of the Bank of England Act 1998 (Macro-prudential Measures) (No.2) Order 2015

4.—(1) The Bank of England Act 1998 (Macro-prudential Measures) (No.2) Order 2015(1) is amended as follows.

(2) In article 2(1)—

(a) for the definition of “consolidated basis”, substitute—

““consolidated basis” means, in relation to a measure, on the basis that the undertaking to which the measure applies and one or more other undertakings are to be treated as a single undertaking;”;

(b) in the definition of “cost benefit analysis”, after “Part 9A” insert “or section 192XA”(2);

(c) after the definition of “G-SII buffer”, insert—

““holding company” means a financial holding company or a mixed financial holding company;”;

(d) omit the definition of “total exposure measure”.

(3) After article 2(1), insert—

“(2) Subject to article 4(4), “total exposure measure” has the meaning given in rules made by the PRA as amended from time to time.”.

(4) For article 3 substitute—

Macro-prudential measures

3.— (1) Subject to paragraph (2), each of the measures set out in article 4 may be applied on, or by reference to, an individual basis or a consolidated basis.

(2) Where a measure set out in article 4(1)(a) or (d) is applied to the holding company of a UK bank or of a UK investment firm, the measure may only be applied to that holding company on, or by reference to, a consolidated basis.”.

(5) In article 4(1), after “UK banks” each time it occurs insert “, or their holding companies,”.

(6) In article 4(1), after “UK investment firms” each time it occurs insert “, or their holding companies,”.

(7) After article 4(3), insert—

“(4) The Financial Policy Committee may include, in a direction relating to any of the measures specified in paragraph (1), specifications as to how the total exposure measure is to be determined for the purposes of that measure.”.

(8) In article 5(2), after “Part 9A” insert “or section 192XA”.

(9) After article 5, insert—

Review

6.— (1) The Treasury must from time to time—

(a) carry out a review of the regulatory provision contained in this Order, and

(b) publish a report setting out the conclusions of the review.

(2) The first report must be published before the end of the period of five years beginning with the day on which this article comes into force.

(3) Subsequent reports must be published at intervals not exceeding five years.

(4) Section 30(4) of the Small Business, Enterprise and Employment Act 2015 requires that a report published under this article must, in particular—

(a) set out the objectives intended to be achieved by the regulatory provision referred to in paragraph (1)(a);

(b) assess the extent to which those objectives are achieved;

(c) assess whether those objectives remain appropriate; and

(d) if those objectives remain appropriate, assess the extent to which they could be achieved in a way which involves less onerous regulatory provision.

(5) In this article, “regulatory provision” has the meaning given in sections 28 to 32 of the Small Business, Enterprise and Employment Act 2015 (see section 32 of that Act).”.

(1)

S.I. 2015/905, as amended by section 24 of the Financial Services Act 2012 and to which there are amendments not relevant to this Order.

(2)

Section 192XA was inserted by Part 1, Schedule 3 to the Financial Services Act 2021.